My Journey from an Engineer to Becoming an Actuary

The Finance Story

Engineer to Actuary...is it a smart choice?

In fact: In today's article, we have Sumit Ramani sharing with us - Why he decided to become an Actuary from engineering? 

He also shares with us the exact strategy he used to clear his Actuary exams. 

Sumit is an engineer and a qualified Actuary from IAI and IFoA.

Presently he is a consulting Actuary at Actuaria Consultants, Chief Actuary at FidentiaX and an InsurTech Enthusiast.

Why Did I decide to become an Actuary after qualifying as an Engineer?

The journey of qualifying as an Actuary is long and not necessarily tough.

One can start pursuing the course soon after grade 12.

There is no reason apart from lack of awareness­­ about the profession that students first do graduation and then pursue actuarial science

Mine is an interesting story - I got to know about Actuary as a profession a few years after I had graduated as an Engineer.

I graduated as an engineer is 2006 and got a job through campus placements.

The day I got a job with an IT company, I realized that I never wanted to be a regular software engineer.

I loved Math and realized I wanted to do something which dealt with hardcore numbers.

After a lot of research, I zeroed on ‘Data Science’ and did my B.Tech project (which was 6 months long). This project involved solving one of the interesting problems around network intrusion.

The research work as a part of the project deserved a publication and it did get published, however, in someone else’s name. Yes - someone else got the credit for my work. It was painful but I did realize that there was no point fighting it (even though I had enough evidence to prove my case).

Because of no credit given to me, I could not make my transition to a data scientist as I did not have anything to substantiate my interest in data science.

If I had fought my case, I would have got credit for my project but would have lost a good amount of time. I chose to move on and it turns out that I am an actuary now.

As a result, I ended up joining the company I had an offer from as a part of the campus placement but my quest to do something with numbers continued.

To clarify, I got an offer from the IT firm when I had finished my 3rd year of engineering. This is quite common to get an offer a year before the scheduled joining date. I did my B.Tech Project in the 4th year of engineering, which was part of the curriculum. Hence, by the time it was the end of 4th year and the time to join the IT firm, I had completed my project, lost credit for it and chose not to fight for it. Everything just fell in place in terms of timing!

Luckily I stumbled upon Actuarial Science in 2007.

A bit of research on the course was enough for me to take the decision and here started a new journey.

To know more about Actuary read this - All You Need To Know about Actuary.

How to Become an Actuary in India

To help you understand better -  If one wants to qualify as an Actuary from Institute of Actuaries of India (IAI), one has to clear 15 papers.

IAI has ACET as an entrance, I like the thinking behind it. It helps one to identify if one is cut out to become an actuary or not. There are many who quit half-way and possibly ACET helps them make this decision much early i.e. right in the beginning.

To make it simple, there are basically four parts in which our studies are divided into:

  • Core Technical (CT-series): 9 set of papers
  • Core Application (CA-series): 3 sets of papers
  • Special Technical (ST-series): 2 set of papers (you choose according to your interest out of 9 available here)
  • Special application (SA-series): 1 set of paper (you choose among 6 papers)

One can give the above papers and series in any order.

In fact, I know someone who has cleared SA2 and yet to clear CT4.

What is an Associate and Fellow Member?

  • Once you clear all the 9 CT papers and all the 3 CA papers, that is 12 papers in total you are eligible to become an Associate Member of the IAI. You must also have a min of one year of work experience.
  • It is not the count of the exam (12) but the type of exam that determines eligibility for Associateship. In my case, my last exam was CA3 and hence I qualified as an Associate and Fellow at the same time.
  • And once you clear all the 15 papers you can become a Fellow Member of the IAI and one needs to have a min of 3 years of work experience.

Apart from IAI, these are the well-known Institutes through which one could appear for Actuarial papers:

  • Institute & Faculty of Actuaries, UK (IFoA) ,
  • Society of Actuaries, US (SoA) and
  • Casualty Actuarial Society, US (CAS)
  • There are many more local institutes spread worldwide. All of the Institutes are regulated by the body International Actuarial Association (IAA)

Most people in India opt for – Institute of Actuaries of India (IAI).

However, many students from India pursue their Actuarial Studies from both – IAI and Institute & Faculty of Actuaries, UK (IFoA).

IAI adopts the same study material as IFoA (UK), except for practical papers. So, they are both the same.

IAI conducts its exams 2 times in a year somewhere in March and Sept while IFoA (UK) also conducts the exams in April and end of Sept, so the dates never clash.

The only difference is – IFoA has no entrance exam while IAI has ACET. Also, the cost of IFoA (UK) is more.

How to study for Actuary exams?

I resigned from the IT Firm (my campus placed company) when I started my Actuarial studies (2007) and joined an Insurance company (in late 2007) but in the IT function of it.

While I was in the IT function, I continued to write and clear exams.

However, it was only in March 2011, I got an opportunity to move to the Actuarial team of the same company (internal move).

Coming to my study journey, in my days IAI had no entrance exam -  ACET. I started directly with CT papers.

I’ll just put the name of the CT papers and you would be able to relate what motive each paper serves, other papers you could check on http://www.actuariesindia.org

CT1Financial Mathematics
CT2Finance and Financial Reporting
CT3Probability and Mathematical Statistics
CT4Models
CT5General Insurance, Life and Health Contingencies
CT6Statistical Methods
CT7Business Economics
CT8Financial Economics
CT9Business Awareness Online Module

  • In terms of studies, it varied a lot. In the initial years, I struggled a lot and failed many times. However, once I cleared CA1 (after I had cleared CT series), I cleared all the remaining exams (i.e. both STs, the SA, and CA2) in 1st attempt. However, CA3, the communications exams delayed my qualification by a year.
  • There is no prescribed order to give exams, I did my CTs first followed by CAs/STs and then SA.
  • Having said that I must add that there are quite a few people who do CTs towards the end.
  • I also wish to highlight that there are few subjects with pre-requisites. For example, CT3 is pre-requisite for CT6 and it helps to attempt exams in that order.
  • Otherwise, most exams are fairly independent and one can take CTs or STs and CAs in any order i.e. you can do CT5 first and CT1 last, all as you wish!

My Study Approach

Start Early

  • On preparing for exams, 2 hours every day and maybe 3-4 hours each during weekends is more than sufficient. With that kind of schedule, one could do 2 CTs in one sitting. However, the trick lies in starting early.
  • Most students wait to get the results of their previous exams in the process you lose 2 months straightway. For example, if the exam that I wrote was on 30th October, I would start studying by 15 Nov.
  • They wait till mid-end Dec (for results to be declared) and then spend another few weeks deciding which exam to write and then will actually start studying. In the process, one has already lost over 2 months.

Prepare daily

  • The most important pre-requisite (as per me) to pursue this course is - Love for numbers, an analytical bent of mind and the most important of all ‘Perseverance’
  • Unlike, other courses it takes several years to qualify as an Actuary and one needs to strike a balance between - Work, Study, and Life!
  • While it is doable, it gets trying at times.
  • The modus operandi for preparation was simple – Study daily, Practice a lot of questions and Revise everything that you studied.
  • In my case, I have come to believe that if I were to practice anything daily, it has to be the first thing in the morning. Studying was no exception.

Balance exams with skills

  • In my mind, students typically make two mistakes - Firstly, taking longer to clear exams and secondly, not balancing exams with skills.
  • It is important to realize that one gets paid for the job one does and not because one has cleared certain exams.
  • Hence, it is important to strike a balance between clearing exams and developing skills.

Should you Pursue from IAI (India) or IFoA (UK)?

  • On writing 30 exams, IAI and IFoA have a one-to-one exemption for almost all the exams. So if you clear CT4 from IFoA, you pretty much have cleared from IAI as well, all you need to is pay the exemption fees. This is true the other way round as well.
  • On taking exams from both IAI and IFoA, I believe what helped me most was the shot-gun approach. While most of my peers appeared for the same exam, say CT4 from both the Institutes (as mentioned above both IAI and IFoA (UK) has the exact same papers), I would appear for different exams. For example, CT4 from IAI and CT5 from IFoA. The rationale for taking the same exam from the two institutes is that one hopes to pass in at least one of them.
  • Frankly, it doesn’t work like a lottery (i.e. the more you play, the more likely you are to win). In fact, when you know you have a back-up, you are unlikely to go all out. But with shot-gun approach, you know if you miss, the next opportunity would be after six months and hence you put your heart and soul in it.
  • Though I started writing papers with IAI papers first I actually qualified from the UK Institute first reason being I was working with stakeholders in the UK and my work required me to understand the UK market. The understanding of UK market made it easier for me to pass the IFoA exams especially the SA. I wouldn’t say one is better than others but, in my case, my UK market work experience helped me understand a few things better.
  • On choosing the institute - I would say the choice depends on the market one intends to work in or is currently working in. If the individual would work in India, it makes sense to write exams from IAI. The arrangement between IAI and IFoA (UK) is such that once qualified from either of the two, it is possible to get a fellowship from the other. In my case, I qualified from IFoA and then also got a fellowship from IAI.

Can Accountants become Actuaries?

  • Personally, I feel that while the two professions CA and Actuary have limited overlap in the curriculum, the combination of CA and an Actuary could be very powerful because the skills are complementary.
  • In particular, Chartered Accountants turned Actuary can bring in a lot of value in M&A and implementation of new accounting standards like IFRS17.
  • In my mind Actuaries who are also Chartered Accountants (CA) bring in a lot of value especially in terms of their understanding of financial statements. I personally know some of them and they are doing well for themselves.
  • While most Actuaries are found in insurance companies, more and more Actuaries are pursuing a career in wider areas. Given the skills, actuaries possess they can work in risk functions of a bank or in analytics functions of any organization.
  • Additionally, actuaries with a background in technology can bring in a lot of value to InsurTechs. For instance, I happen to be advising a Singapore-based InsurTech called FidentiaX. FidentiaX is setting up a marketplace for tradable life insurance policies powered by Blockchain.

You can reach him at sumit@actuaria.in/thecastory@gmail.com.

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